Tight Schedules, Part 2: Lessons from the NEMT Sector

How much a transportation provider is paid has an obvious impact on safety. But more important is the rate structure by which that provider is paid. Non-Emergency Medical Transportation (NEMT) service is a poster child for the dysfunctional consequences of a hapless rate structure and compensation formula.

Insights Squandered

In 1964, President Johnson created the Urban Mass Transportation Administration (UMTA) to support the Department of Housing and Urban Development’s (HUD) Model Cities Program. UMTA capital funds paid for 80 percent of buses, trains and other capital improvements. In 1967, when Johnson created the U.S. Department of Transportation (USDOT), UMTA (now the Federal Transit Administration) was quickly moved from HUD into USDOT.

Regrettably, nothing similar happened to the transportation provided through MediCare, another Johnson-era achievement. To this day, funds for MediCare-related transportation (as well as Medicaid-funded transportation) continue to flow from Federal healthcare agencies to healthcare or other non-transportation agencies at the state or county levels. Picture your local transit agency in charge of your city’s ballet.

Overwhelmed and Disengaged

A healthcare bureaucracy is no match for a clever NEMT provider. Until the early 2000s in some places, and still today in others, many NEMT providers earn most of their money in some cute ways:

  • Invoices for transportation are usually submitted in some form of Transportation Authorization Requests (TARs), typically authorized by a physician or local, county or regional healthcare provider. As usual for any mode of U.S. transportation, monitoring is rare. So why would a NEMT provider provide an actual trip when it can simply submit a fantasy for it? TARs for trips never provided have been a staple of the NEMT industry for decades. Where they are not, this practice has not been supplanted by worse practices by NEMT brokers.


  • NEMT providers are generally paid on a combined per-trip and per-passenger basis. So the provider is paid nothing for its mileage unless the vehicle has at least one passenger on board when the vehicle is moving. On board, every passenger accrues “passenger miles.” So, with no ride-time limits and no monitoring, one can make lots of money effortlessly: Pick up a bunch of passengers and drive them around in circles for a few hours. The higher the speeds, the more miles covered, and the greater the reimbursement. Directness-of-routing regulations which govern most taxi services are non-existent in the NEMT world. Governed by public agencies with no remote understanding of transportation, NEMT providers make small fortunes from spaghetti routing passengers in travel marathons.


This latitude naturally leads to abuse. Every taxi contains a meter. But that meter  generates income when the vehicle is not moving (albeit at a lower rate). No such meter is installed in any NEMT vehicle. So, not earning a dime when the vehicle is not moving, why would an NEMT provider wish its drivers to secure a wheelchair? Why would it do so when its service is never monitored? It is no wonder that wheelchair tip-overs are rampant.  But wheelchair tip-overs are only one of many safety compromises to which NEMT passengers are subjected (see Safety Compromises in National Bus Trader, September, 2017 through November, 2018, and safetycompromises.com)

Broken and Brokers

Like transit agencies running the ballet, healthcare agencies were overwhelmed by the dynamics of providing demand-responsive transportation. With so much corruption and padding, little of the funding was spent on the actual provision of trips, much less efficient trips. After decades of ignorance and sloth, it dawned on a few of these agencies how to rid themselves of the problem. Do what Americans do when things are broken: Wipe your hands of the responsibility. Hire a broker.

Unlike the avalanche of funds for MediCare-, Medicaid- and VA transportation, complementary paratransit service provided by transit agencies or their contractors is an “unfunded mandate.” To shave costs, transit agencies created all type and manner of barriers to limit ridership. The FTA has never once punished  any of its grant recipients, despite extraordinary, blatant violations of the ADA. But there were plenty of class action lawsuits.  In contrast, MediCare, Medicaid and Veterans Administration (VA) services have been effected by few if any class action lawsuit. So abuses run wild.

After decades of these abuses, and decades of being bilked by their service providers, the healthcare sector’s solution to these problems was, as noted, to engage brokers. But with the underlying ignorance of these agencies, engaging brokers only made the problems worse. At the core of these problems lay the healthcare industry’s practice of paying for medical services on a per capita basis: Some amount per patient per month, irrespective of how often or how much assistance the patient needs. Like the healthcare agencies that proceeded them, NEMT brokers anointed their transportation providers with this same approach.

As anyone in the transportation field knows, costs are incurred on some combination of per-hour, per-mile and fixed cost bases. It is impossible to translate these costs into some coherent “per-capita” or per-passenger-per-month basis. Trying to determine how often any client would travel was a crap-shoot. So too, as a result, was figuring out how to bid. Few potential brokers could make a good guess, or could afford to guess. Those few which could were gigantic oligopolies with decades of experience either providing NEMT service or designing scheduling software. With their competitors afraid to guess, these oligopolies bid outrageous sums for their services. We should not wonder why NEMT costs are as bloated as other healthcare costs.

At the operating level, service providers did even not have to bid. They were identified as potential providers by the healthcare agencies. But instead of selecting them, the brokers engaged any of them willing to work for peanuts. In fact, the healthcare agencies encourage brokers to “negotiate.”

Government Gone Sad

What sets these dynamics loose is the fact that, apart from administrative costs,  the only genuine costs brokers incur are their reimbursements to the contractors who actually provide the trips. So, with brokers allowed to keep all the money left over, why would they pay any subcontractor anything substantial? And unmonitored, with the service providers indemnifying them, why would brokers value qualities like safety or reliability?  The healthcare agencies governing these brokers’ performance have no understanding of these dynamics and do not care. Why should they? They, in turn, are indemnified by their brokers. As one would expect, this sensibility has dribbled down to the brokerage level. Years ago, presumably to avoid committing perjury, the executive director of one large oligopoly testified, “Oh, we don’t do anything our contract requires us to do.” Within this environment, scratching for a living while their brokers get rich, and not getting paid for doing so by their brokers, why would anyone secure a wheelchair?

Malaise, Sloth and Missed Opportunities

One might at first think that these dangerous risks would at least be challenged at the legal level. Yet while wheelchair tip-overs are rampant, perhaps one out of five of victims are injured. Of that crudely-estimated 20 percent, only a small fraction are injured badly enough to engage an attorney. Of those who do, the attorneys willing to work hard on such cases are rare. More rare is their designation of a qualified expert. And even with a qualified expert, few attorneys are willing to go after the brokers, despite their deep pockets. Shaking out these numbers, perhaps the perpetrator of one out of every 500 wheelchair tip-overs is held marginally accountable. The perpetrator of one out of every 5000 tip-overs is held seriously accountable. This is somewhat hard to explain since anyone can learn about all these dynamics on wheelchairtipovers.com. So too can one learn about passenger securement dynamics on wheelchairandpassengersecurement.com.

Frankly, with a reasonable amount of work, it is almost impossible for a plaintiff’s counsel to lose a wheelchair tipover case. Only two of the more than 100 such cases I have done have ever gone to trial. Assisting the plaintiffs’ counsel, we won $2M or more both times. Defendants’ attorneys involved in most public transportation accidents and incidents of all types rarely engage an expert until the last minute. Given the haplessness and sloth of so many plaintiffs’ attorneys, one can hardly blame them.

Most astonishing to me is all the money that plaintiffs’ attorneys “leave on the table” when pursuing wheelchair tipover cases. First, the vehicle is almost always behind schedule, and the schedules are often too tight – both easy to check as a discovery matter, Secondly, many times the hardware to attach a chair to the floor and/or the hardware to secure a wheelchair user into his chair are missing, mis-matched, broken or rusted-in-place. Particularly when this stuff is missing – like not enough floor fittings to attach a lap belt to — no wheelchair user who had ever ridden in that vehicle was secured.

As many of us well know, Rosa Parks likely risked her life by refusing to sit in the back of her bus. Thousands of her generation were lynched for lesser things. At the same time, Ms. Parks’ seat was welded or bolted to the floor. She was not a wheelchair user. And she was not violently jettisoned from her seat, much less with the seat following on top of her. Finding a vehicle deficient in securement equipment is a civil rights case. The injunctive relief likely to follow can be frightening. Insurance carriers underwriting all modes of public transportation should take heed.

Dreams and Pipe Dreams

It should be obvious why many NEMT providers never secure any wheelchairs. This is even more shameful in the era of Q-Straint’s most recent securement technology. With the discs of the QRT-Max system, a driver can secure each position of a wheelchair’s structure in a matter of seconds, using a single hand. Of course, to do so, the vehicle must be equipped with the full accoutrement of hardware. And the pieces must match and fit together. And they cannot be rusted in place.

Most importantly, there must be time in the schedule to attach these important pieces to each wheelchair, and its occupant to the chair. As noted, in the NEMT world, the service providers are not paid a dime unless and until the vehicle is moving. Indemnified by its broker, why should a healthcare agency care? Indemnified by its service providers, why should a broker care?

Motorcoach Industry Echoes and Ripples

Why should all this matter to a motorcoach company? One reason is that many motorcoach companies are paid for by the trip. This dynamic is even worse where the drivers are paid by the trip. Paid by the trip, and completely or ineffectively unmonitored, why would  a driver do anything safely that requires extra time?

The motorcoach industry is a stable, much-needed  sector with a strong safety record, blotted only occasionally by terrible accidents and sensationalist news stories long on gore but short on details. We have many operating dynamics in common with NEMT service, particularly per-trip payment arrangements for many companies and drivers.

We can learn valuable lessons from the failures of the NEMT sector. We should.

Publications: National Bus Trader.